financially clueless senior MIL who thinks she’s rich

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miumiu
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financially clueless senior MIL who thinks she’s rich

Post by miumiu » Thu Sep 26, 2019 12:54 pm

Hello,

my father in law just passed away and he was the one taking care all the finances. My mother in law is 84 years old, here are her believes that are really concerning.

1. She thinks Medicare will take care of her, until she dies, including nursing home, long term care, etc.

2. She thinks she is rich and can do whatever she wants once she sells the house. Her house is in a rural area and probably sells for $200k. They have $190k in savings ( my FIL had it all in CD ). Her SSI+pension is about $2200 per month.

3. She would like to move into a retirement community and feels she can afford paying $4000 in monthly rent.

Here’s what we think: she needs to preserve at least $200k just to pay for nursing home in the future. Therefore she’ll have to make that other $200k last. If she rents a place for $4k a month ( independent living ), with other monthly expenses, annually she’ll have to withdraw $30k, with annual rent increases of 5%, $200k money will be depleted in maybe 6 or 7 years.

My MILis 84, physically very healthy, her father lived to 105. All her siblings including older one are healthy and living. Potentially she’ll live another 15 to 20 years.

She’s healthy physically but mentally she’s like a child because her husband always took care of everything. she was pretty frugal since she’s from that generation and her husband had the control of finance. Now she found out about all the big money ( in her mind ). However she is financially clueless, and we don’t know how to start her education about budgeting financially for her old age.

My husband tried to take over the bill pays and bank account to manage it for her. But she has refused to let him help.

We don’t need her inheritance or her house. We just don’t want her to squander away all the her money then ruin our own retirement.

What do you do about such a person? How to start the education about her financial reality?

barnaclebob
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Re: financially clueless senior MIL who thinks she’s rich

Post by barnaclebob » Thu Sep 26, 2019 1:19 pm

Focus on what you can control, and thats your own retirement. She cannot ruin that for you, only you and your husband can ruin it by providing for her if she squanders this money. Discuss what you are and aren't willing to do for her sooner rather than later.
Last edited by barnaclebob on Thu Sep 26, 2019 1:19 pm, edited 1 time in total.

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Re: financially clueless senior MIL who thinks she’s rich

Post by Vanguard Fan 1367 » Thu Sep 26, 2019 1:19 pm

That sounds like the challenge of the year. At 4k a month rent it won't be long before she is eligible for Medicaid help with the Nursing home without worrying about the 200k being around to interfere with the Medicaid.

Good luck, it can be hard to teach an old dog new tricks.

fposte
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Re: financially clueless senior MIL who thinks she’s rich

Post by fposte » Thu Sep 26, 2019 1:23 pm

Is there any provision for continuing care at that retirement community? I don't know if her assets would be enough to get her into a CCRC even at 84, but it wouldn't hurt to ask, and that would solve the nursing home problem.

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Re: financially clueless senior MIL who thinks she’s rich

Post by Jack FFR1846 » Thu Sep 26, 2019 1:33 pm

You offered to help and she said "bud out".

I don't see any further questions here.
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Re: financially clueless senior MIL who thinks she’s rich

Post by drawpoker » Thu Sep 26, 2019 1:35 pm

This is a tough situation.

If I were you, would start with her doctor. Meaning, she will have to sign a consent form to allow the doc to speak with you and your spouse regarding her health. If she agrees to this without any hassles you can then explore with the doc just what is her mental state and cognitive abilities. Be frank, tell the doc just what you posted here; you and spouse are concerned that she just doesn't "get it" regarding her financial position.

IF she absolutely refuses permission for doc to share her medical information - at age 84 to boot - that in itself would be a huge red flag and alarm going off. That she is in significant cognitive decline.

When you broached the subject of you or spouse taking care of paying her monthly bills, arranging for household repairs/maintenance issues when they arise, and otherwise overseeing her expenses and payments, how did you present it? If her late husband was the one to do this, surely she does not expect to do these things herself now, does she. Again, if she readily agrees and seems grateful for the help, that would be a good sign. If she resists, uh oh. Not good.

ohai
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Re: financially clueless senior MIL who thinks she’s rich

Post by ohai » Thu Sep 26, 2019 1:40 pm

Jack FFR1846 wrote:
Thu Sep 26, 2019 1:33 pm
You offered to help and she said "bud out".

I don't see any further questions here.
Seems kind of inescapable though. If MIL goes bankrupt, she'll ask for help and they can't exactly say take a hike.

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Re: financially clueless senior MIL who thinks she’s rich

Post by fru-gal » Thu Sep 26, 2019 1:47 pm

We don't have enough information. Consider what the MIL is spending annually besides rent - what is in the $500 per month? There seems to be no accounting for the $390000 earnings.

The OP has arbitrarily halved the funds available and then used that half to make projections. She says Mom in law is very healthy then projects a nursing home.

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Re: financially clueless senior MIL who thinks she’s rich

Post by willthrill81 » Thu Sep 26, 2019 1:48 pm

ohai wrote:
Thu Sep 26, 2019 1:40 pm
Jack FFR1846 wrote:
Thu Sep 26, 2019 1:33 pm
You offered to help and she said "bud out".

I don't see any further questions here.
Seems kind of inescapable though. If MIL goes bankrupt, she'll ask for help and they can't exactly say take a hike.
That's sadly the case when close family members are involved. Their business is your business, whether you want it to be or not, unless you're comfortable blowing them off.
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Ybsybs
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Re: financially clueless senior MIL who thinks she’s rich

Post by Ybsybs » Thu Sep 26, 2019 1:54 pm

Let's say her expenses are $5k a month ($4k community + $1 other stuff). If she ends up with $390k (that $200k of savings mentioned and $190k from the house), it's roughly $3k draw down per month after social security of $2k. That means she's got around ten and a half years of expenses.

If she runs out, she'll be on Medicaid.

That sucks, but it's not like a reasonable person would expect you to produce $3k/month for her.

The thing you have to figure out is how much you are willing to give if she outlives her money. It's a difficult topic, but that's the part of this actually under your control.

delamer
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Re: financially clueless senior MIL who thinks she’s rich

Post by delamer » Thu Sep 26, 2019 2:00 pm

fposte wrote:
Thu Sep 26, 2019 1:23 pm
Is there any provision for continuing care at that retirement community? I don't know if her assets would be enough to get her into a CCRC even at 84, but it wouldn't hurt to ask, and that would solve the nursing home problem.
If the retirement community that she is considering does have varying levels of care (as opposed to being just a rental complex geared to seniors), then she’ll have to make a full financial disclosure to get in.

If they let her in and provide for moving her to Medicaid if she outlives her assets, then — as fposte says — the nursing home issue is solved.

So help her make her application (again, assuming a true retirement community) and see what happens. In other words, let the retirement community make the decision as to whether it’s affordable for her (and for you).
Last edited by delamer on Thu Sep 26, 2019 2:02 pm, edited 1 time in total.

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Re: financially clueless senior MIL who thinks she’s rich

Post by 2pedals » Thu Sep 26, 2019 2:02 pm

barnaclebob wrote:
Thu Sep 26, 2019 1:19 pm
Focus on what you can control, and thats your own retirement. She cannot ruin that for you, only you and your husband can ruin it by providing for her if she squanders this money. Discuss what you are and aren't willing to do for her sooner rather than later.
+1
Family issues are tough. Everybody's situation is different so it hard to give a recommendation on this issue and how much help or assistance should be provided. I seen a lot worse than what your MIL is doing or possibly going to do (at 84 she is not broke). One thing that is certain in my mind you must protect you and your husbands future.

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Re: financially clueless senior MIL who thinks she’s rich

Post by fru-gal » Thu Sep 26, 2019 2:05 pm

Ybsybs wrote:
Thu Sep 26, 2019 1:54 pm
Let's say her expenses are $5k a month ($4k community + $1 other stuff). If she ends up with $390k (that $200k of savings mentioned and $190k from the house), it's roughly $3k draw down per month after social security of $2k. That means she's got around ten and a half years of expenses.
Only if she is keeping the $390k under the mattress so it earns no interest, like even CDs are earning 2.5% a year.

GrowthSeeker
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Re: financially clueless senior MIL who thinks she’s rich

Post by GrowthSeeker » Thu Sep 26, 2019 2:09 pm

1.
barnaclebob wrote:
Thu Sep 26, 2019 1:19 pm
Focus on what you can control, and thats your own retirement. She cannot ruin that for you, only you and your husband can ruin it by providing for her if she squanders this money. Discuss what you are and aren't willing to do for her sooner rather than later.
For example, don't sign papers obligating you to pay for the assisted living if she can't.

2. One thing you can control is what information you can acquire: what are the Medicaid and Welfare rules regarding if she spends her assets down low enough. How low? Sometimes the Medicare-Medicaid combination can cover quite a lot; but I'm not sure about assisted living. Probably not. But long term nursing home care might be covered at some institutions, in some states.

3. Usually when people have a strong opinion about something, the facts don't change their opinion, but ...
There is the math way.
Engage MIL to help in the activity of making a list of income, all expenses, assets and debts. Do this for the current situation and then also for the what-if she sells the house and moves to the assisted living place.
Then compute how many years until she runs out of money.
Just because you're paranoid doesn't mean they're NOT out to get you.

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ResearchMed
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Re: financially clueless senior MIL who thinks she’s rich

Post by ResearchMed » Thu Sep 26, 2019 2:17 pm

delamer wrote:
Thu Sep 26, 2019 2:00 pm
fposte wrote:
Thu Sep 26, 2019 1:23 pm
Is there any provision for continuing care at that retirement community? I don't know if her assets would be enough to get her into a CCRC even at 84, but it wouldn't hurt to ask, and that would solve the nursing home problem.
If the retirement community that she is considering does have varying levels of care (as opposed to being just a rental complex geared to seniors), then she’ll have to make a full financial disclosure to get in.

If they let her in and provide for moving her to Medicaid if she outlives her assets, then — as fposte says — the nursing home issue is solved.

So help her make her application (again, assuming a true retirement community) and see what happens. In other words, let the retirement community make the decision as to whether it’s affordable for her (and for you).
Yes, try to find a decent facility that has independent, assisted living (or start here?), and then skilled nursing care units (and memory care would be good just in case), and one that will keep someone on Medicaid after they run out of money.
-->> But do this SOON, while she still has enough money to qualify for something decent.
If you/she wait until she's out, her choices are likely to be restricted to the less pleasant facilities.

Then, once she is on Medicaid, you won't be responsible for her expenses, but you'll be allowed to give her some extras (double check with an Elder Care Attorney ASAP about all of this, for now and then later).

If she refuses to "plan", then this is the best you can do... and hopefully she'll agree to find a place where she can "stay".

RM
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gr7070
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Re: financially clueless senior MIL who thinks she’s rich

Post by gr7070 » Thu Sep 26, 2019 2:19 pm

miumiu wrote:
Thu Sep 26, 2019 12:54 pm
.Her house is in a rural area and probably sells for $200k. They have $190k in savings ( my FIL had it all in CD ). Her SSI+pension is about $2200 per month.

My MILis 84
I think you're far too conservative. Her likelihood to live another 20 years is insanely low.

She's worth 400k plus 2200 per month guaranteed.

In 7 years, even with 200k depleted, she'll be very, very old and still have 200k plus 2200 guaranteed.

I don't think that's wholly unreasonable.

Not saying she's rich, but you may need to temper your own opinion here, as well, not just her??? Something to consider.

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Re: financially clueless senior MIL who thinks she’s rich

Post by livesoft » Thu Sep 26, 2019 2:23 pm

The OP should have a fun time discussing all this in the presence of MIL and all her siblings. I think her siblings are they way to get her to think about things and not the OP nor OP's spouse.

The conversation could be started with, "Hey Mom, what have Uncle Ernie and your other sisters and brothers told about about growing old, Medicare, nursing homes, and so on."
-or-
"Hey Uncle Ernie, does Medicare pay for nursing home care?"
Last edited by livesoft on Thu Sep 26, 2019 2:25 pm, edited 1 time in total.
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Re: financially clueless senior MIL who thinks she’s rich

Post by Fallible » Thu Sep 26, 2019 2:23 pm

miumiu wrote:
Thu Sep 26, 2019 12:54 pm
...
She’s healthy physically but mentally she’s like a child because her husband always took care of everything. she was pretty frugal since she’s from that generation and her husband had the control of finance. Now she found out about all the big money ( in her mind ). However she is financially clueless, and we don’t know how to start her education about budgeting financially for her old age.
...What do you do about such a person? How to start the education about her financial reality?
She's 84 and may have some cognitive decline (not dementia) playing a role here, in addition to limited experience handling money and losing a husband. You say she doesn't understand her financial situation, but the question is how much and how quickly she can learn and adapt to change at this stage of her life. How are you approaching this now in a way that can make it easier for her to understand and accept?

Also, you say she is physically healthy, but most likely she does have some health problems at this age, e.g., arthritis, seeing, hearing, etc. It would be good to stay on top of that if you can as her health needs increase expenses.
Last edited by Fallible on Thu Sep 26, 2019 2:34 pm, edited 1 time in total.
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Re: financially clueless senior MIL who thinks she’s rich

Post by HomeStretch » Thu Sep 26, 2019 2:24 pm

It’s understandable that you are concerned about MIL’s ability to make her money last and the impact it could have on your finances if she needs support. After reading your post, here are some thoughts that come to mind:

1. MIL is an adult and can make her own decisions including not having her son manage her finances. You say she is “mentally like a child”. If you mean she is inexperienced in financial matters, then as long as she is mentally competent she has the right to make her own financial decisions, good or bad. If you mean she is potentially legally incompetent and unable to manage her own affairs, her children should consult an elder care attorney to discuss a conservatorship.

2. MIL is 84. Even if physically healthy, maintaining a house by herself may be too much for her and too socially isolating. Moving to independent living where she can get some assistance like cleaning, meals and transportation is likely necessary now or in the near future.

3. Better to move now than have to do so after things fall apart with the house. Plus it will be easier on her family if she lives in a place with assistance rather than relying on family to help her live in her home. MIL may also be lonely and her new home could provide her with an active social life and friends that look out for one another.

4. Average life expectancy for an 84 year old female is 7.5 years. Longevity runs in the family. A $390k portfolio can likely support her to age 97 (13 years) of $30k withdrawals. Her rent may go up but her portfolio will have earnings and her SS and possibly pension income have cost-of-living increases.

5. If she runs out of savings, she will still have monthly SS and pension income and likely qualify for public assistance. If she needs a nursing home, she will need to use one that will accept her income / Medicaid. If her husband was a US veteran, she is possibly eligible for assistance under the VA Aid and Attendance program.

6. You/spouse should not let concerns over finances negatively affect your family’s relationship with MIL. Enjoy the time your family has left with MIL. She just lost her spouse. Perhaps in two years, she’ll think about another move. Spouse should be upfront with her about what support, if any, the two of you can provide to her If her savings run out.

Best of luck.
Last edited by HomeStretch on Thu Sep 26, 2019 2:30 pm, edited 1 time in total.

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miumiu
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Re: financially clueless senior MIL who thinks she’s rich

Post by miumiu » Thu Sep 26, 2019 2:24 pm

drawpoker wrote:
Thu Sep 26, 2019 1:35 pm
This is a tough situation.

If I were you, would start with her doctor. Meaning, she will have to sign a consent form to allow the doc to speak with you and your spouse regarding her health. If she agrees to this without any hassles you can then explore with the doc just what is her mental state and cognitive abilities. Be frank, tell the doc just what you posted here; you and spouse are concerned that she just doesn't "get it" regarding her financial position.

IF she absolutely refuses permission for doc to share her medical information - at age 84 to boot - that in itself would be a huge red flag and alarm going off. That she is in significant cognitive decline.

When you broached the subject of you or spouse taking care of paying her monthly bills, arranging for household repairs/maintenance issues when they arise, and otherwise overseeing her expenses and payments, how did you present it? If her late husband was the one to do this, surely she does not expect to do these things herself now, does she. Again, if she readily agrees and seems grateful for the help, that would be a good sign. If she resists, uh oh. Not good.
Thanks for the suggestions. We will make arrangement to meet with her a doctor to talk to her about cognitive abilities evaluation. In the past she has given us permission to share medical information.

My husband told her he’s following dad’s wish that he takes care of her. She says she appreciates it and is grateful but she doesn’t want to be a burden and wants to do everything herself. We are really worried that she might get scammed since she’s really naive about finances.

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Watty
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Re: financially clueless senior MIL who thinks she’s rich

Post by Watty » Thu Sep 26, 2019 2:26 pm

miumiu wrote:
Thu Sep 26, 2019 12:54 pm
Therefore she’ll have to make that other $200k last. If she rents a place for $4k a month ( independent living ), with other monthly expenses, annually she’ll have to withdraw $30k,...

My MILis 84, physically very healthy, her father lived to 105. All her siblings including older one are healthy and living. Potentially she’ll live another 15 to 20 years.
One thing to consider is if a Single Premium Immediate Annuity would make sense for her. I just took a quick look at immediate annuntie.com and it looks like $250K would buy an annuity that would pay her about $30K a year. It would not be adjusted for inflation but she would also have another $140K to cover large expenses or inflation.

https://www.immediateannuities.com/
miumiu wrote:
Thu Sep 26, 2019 12:54 pm
my father in law just passed away.....
She just lost her husband so it would be good to defer any big decisions for at least six months if possible.

Unless there is some urgent need for her to move it would likely take that long to downsize her stuff and get the house ready to sell anyway.

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Re: financially clueless senior MIL who thinks she’s rich

Post by Doom&Gloom » Thu Sep 26, 2019 2:32 pm

Perhaps she has the same experiences as my MIL, now 91, who has lived in a semi-rural area for decades. After FIL died she became responsible for finances as well as everything else. She got all of her (mis)information and tons of poor advice from her friends and church members who were woefully ill-informed. If that is the case here, good luck altering her beliefs about Medicare, Medicaid, Social Security, and governmental assistance in general.

The primary differences between them is that my MIL vehemently refuses to move and still lives alone in a 3 BR home on several acres and she reluctantly accepted assistance from DW after MIL's hearing and macular degeneration reached the point that she did not want the hassle of paperwork and phone calls.

OP, I don't envy you, but before I started pressuring her to accept your assistance, I would spend some time exploring how well informed she is about financial matters and providing some basic education where needed. If she has a more realistic grasp of her situation, she may be more willing to accept some help. Good luck!

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Re: financially clueless senior MIL who thinks she’s rich

Post by pinetree » Thu Sep 26, 2019 2:43 pm

She’s an adult. Explain your concerns once, including the calculations you’ve presented here. Then drop it. You don’t have to save her from her own bad decisions. If she runs out of money and has to get public assistance or be placed in a Medicaid nursing facility at the end of her life, that is her choice and her business. It’s painful to watch but that’s life.

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Re: financially clueless senior MIL who thinks she’s rich

Post by sd323232 » Thu Sep 26, 2019 2:49 pm

Jack FFR1846 wrote:
Thu Sep 26, 2019 1:33 pm
You offered to help and she said "bud out".

I don't see any further questions here.
I agree, I think OP needs to stay away, this is none of her business, and MIL already said so.

mptfan
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Re: financially clueless senior MIL who thinks she’s rich

Post by mptfan » Thu Sep 26, 2019 2:49 pm

Jack FFR1846 wrote:
Thu Sep 26, 2019 1:33 pm
You offered to help and she said "bud out".

I don't see any further questions here.
I agree.

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Re: financially clueless senior MIL who thinks she’s rich

Post by Katietsu » Thu Sep 26, 2019 2:54 pm

Focus on letting her make decisions for herself and maintaining her autonomy while you do what you can to provide information and watch from afar towards keeping her from being scammed or making large mistakes. As you have seen in the other responses, her plan is not necessarily unreasonable. It is just different than the plan that you, I and many on this forum would be comfortable using.

As an aside: To her, Medicare vs Medicaid paying for a nursing home may be irrelevant. In one area where I have family, there is no difference in the nursing home selection/care for those on Medicaid vs self pay. The bigger issue is that Medicaid does not pay for assisted living. Therefore, Medicaid patients there often end up in a skilled nursing home setting when an assisted living facility would be a better fit. I would see if this applies in her area.

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Re: financially clueless senior MIL who thinks she’s rich

Post by bayview » Thu Sep 26, 2019 2:55 pm

pinetree wrote:
Thu Sep 26, 2019 2:43 pm
She’s an adult. Explain your concerns once, including the calculations you’ve presented here. Then drop it. You don’t have to save her from her own bad decisions. If she runs out of money and has to get public assistance or be placed in a Medicaid nursing facility at the end of her life, that is her choice and her business. It’s painful to watch but that’s life.
Wow. I'm not from one of the cultures commonly regarded as sacrificing for one's elders - just boring WASP - but there is no way that I could take a "that's life" approach to an aging parent. Even when they made decisions that I thought were uninformed and ill-advised. I figure they took care of me in my early life, and I can try my best to do the same for them in their last years. I wouldn't sacrifice my retirement, but I'd do more than shrug my shoulders and say "oh well." Even if it wasn't technically my business, I wouldn't just walk away either.

OP, I suppose I'd have my husband (not you) and any siblings (not in-laws) have the convo with MIL, telling her that she has been given bad information, that while she's in decent shape, she needs to be very careful with her money, and that if she runs out, she will be looking at a Medicaid nursing home bed, and that the kids would do what they could, but that there's no magic. Definitely avoid giving the message of "OMG, you're broke", which would only make her ignore any accompanying message.

In the meantime, doesn't AARP or a similar outfit have a "facts of elder life" resource that sums up what SS, Medicare, and what-not do and don't do? She needs to see something in print, not scary words coming from her family or erroneous words coming from her friends.

I'd especially worry about someone steering her to Edward Jones. She's a prime candidate for exploitation.

***note: willingness to help out parents who have abused alcohol and drugs, or have gambling or shopping dependencies, is another story entirely. Enabling won't help anyone.
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Re: financially clueless senior MIL who thinks she’s rich

Post by Olemiss540 » Thu Sep 26, 2019 2:59 pm

gr7070 wrote:
Thu Sep 26, 2019 2:19 pm
miumiu wrote:
Thu Sep 26, 2019 12:54 pm
.Her house is in a rural area and probably sells for $200k. They have $190k in savings ( my FIL had it all in CD ). Her SSI+pension is about $2200 per month.

My MILis 84
I think you're far too conservative. Her likelihood to live another 20 years is insanely low.

She's worth 400k plus 2200 per month guaranteed.

In 7 years, even with 200k depleted, she'll be very, very old and still have 200k plus 2200 guaranteed.

I don't think that's wholly unreasonable.

Not saying she's rich, but you may need to temper your own opinion here, as well, not just her??? Something to consider.
Agreed. Mother in law is rich compared to most any 84 year old. Live it up and BLOW IT OUT in the new retirement community. If I am desolate and broke at 95, with only 2200/mo to live on, I will call that a SERIOUS life victory.
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Re: financially clueless senior MIL who thinks she’s rich

Post by sd323232 » Thu Sep 26, 2019 3:11 pm

Olemiss540 wrote:
Thu Sep 26, 2019 2:59 pm
gr7070 wrote:
Thu Sep 26, 2019 2:19 pm
miumiu wrote:
Thu Sep 26, 2019 12:54 pm
.Her house is in a rural area and probably sells for $200k. They have $190k in savings ( my FIL had it all in CD ). Her SSI+pension is about $2200 per month.

My MILis 84
I think you're far too conservative. Her likelihood to live another 20 years is insanely low.

She's worth 400k plus 2200 per month guaranteed.

In 7 years, even with 200k depleted, she'll be very, very old and still have 200k plus 2200 guaranteed.

I don't think that's wholly unreasonable.

Not saying she's rich, but you may need to temper your own opinion here, as well, not just her??? Something to consider.
Agreed. Mother in law is rich compared to most any 84 year old. Live it up and BLOW IT OUT in the new retirement community. If I am desolate and broke at 95, with only 2200/mo to live on, I will call that a SERIOUS life victory.
I agree!!! Let the MIL party it up , she deserves it!!

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Re: financially clueless senior MIL who thinks she’s rich

Post by Moland » Thu Sep 26, 2019 3:20 pm

I think she would be a good fit for independent senior living. $4,000.00 sounds high for this type of housing. You might shop around and see what is available, sounds like she has put some effort into this already.
Most seniors in America have less money then her and think they don't have a care in the world.

mptfan
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Re: financially clueless senior MIL who thinks she’s rich

Post by mptfan » Thu Sep 26, 2019 3:20 pm

gr7070 wrote:
Thu Sep 26, 2019 2:19 pm
I think you're far too conservative. Her likelihood to live another 20 years is insanely low.
I agree. The life expectancy of an 80 year old is 9 years, so it's not likely she will live much past the age of 90. Sure, it could happen, but it is unlikely. Planning for her to live until 104 is not realistic... only .017% of Americans live past the age of 100.

http://www.genealogyintime.com/Genealog ... page1.html

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Re: financially clueless senior MIL who thinks she’s rich

Post by surfstar » Thu Sep 26, 2019 3:23 pm

Running out of personal funds in your 90s and having medicaid finish off your life, is better than 99% of the population, I imagine.

We'd aspire to have that happen.

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Re: financially clueless senior MIL who thinks she’s rich

Post by carolinaman » Thu Sep 26, 2019 3:24 pm

delamer wrote:
Thu Sep 26, 2019 2:00 pm
fposte wrote:
Thu Sep 26, 2019 1:23 pm
Is there any provision for continuing care at that retirement community? I don't know if her assets would be enough to get her into a CCRC even at 84, but it wouldn't hurt to ask, and that would solve the nursing home problem.
If the retirement community that she is considering does have varying levels of care (as opposed to being just a rental complex geared to seniors), then she’ll have to make a full financial disclosure to get in.

If they let her in and provide for moving her to Medicaid if she outlives her assets, then — as fposte says — the nursing home issue is solved.

So help her make her application (again, assuming a true retirement community) and see what happens. In other words, let the retirement community make the decision as to whether it’s affordable for her (and for you).
My mother went into assisted living at age 88 (in VA). She then fell and they refused to keep her. We were forced to find a nursing home and her condition had declined to where that was appropriate. Initially she did private pay but she drew down all her savings in a few months. Medicaid then took over. She kept her same private room in a nice facility until she died at 89. I would not worry about keeping $200k for nursing home. Medicaid will kick in when she runs out of money, and if she is doing private pay, chances are she will remain in that same facility with the same standard of care. I would focus on getting her into a nice assisted living facility, and ideally one that has multiple levels of care so can increase her level of care as her needs increase.

FWIW, my wife's brother has done essentially the same thing in NC. He and his wife started with assisted living. His wife died a couple of years later and he eventually ran out of money. He is still in the same nice facility in South Charlotte with same level of care. I do not know if this is always true but it was in these 2 cases.

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Re: financially clueless senior MIL who thinks she’s rich

Post by barnaclebob » Thu Sep 26, 2019 3:39 pm

miumiu wrote:
Thu Sep 26, 2019 2:24 pm
My husband told her he’s following dad’s wish that he takes care of her. She says she appreciates it and is grateful but she doesn’t want to be a burden and wants to do everything herself. We are really worried that she might get scammed since she’s really naive about finances.
Can you explain that the real burden is the uncertainty over her finances and that its not a burden to help with them? Pose it in a way that you want to make sure she has a sustainable budget and not that you want to control her spending.

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Re: financially clueless senior MIL who thinks she’s rich

Post by BarbBrooklyn » Thu Sep 26, 2019 3:40 pm

There's a wonderful site www.agingcare.com. Good forum with lots of sensible people.

Your MIL DOESN'T want to be a burden; that's a very good thing. Start every sentence with "mom, you said that you don't want to be a burden; here's how you can help us figure this out..."

Does someone have POA and a Health Care proxy? Two documents that are absolutely necessary. If she gets hit by a bus tomorrow, or has a stroke, it she wants someone to be able to pay her bills and express her end of life wishes, she needs to get those documents in place. As we said to my mom, it can be us making hard decisions, or it can be the State of New York.

With regard to finances, my (and my brothers') stance toward our mom was "mom, if you want our help, that's great; let's investigate the best way to do this stuff, talk to your lawyer and set things up". She was cooperative.

If she had balked, we would have said "mom, we are sad and disappointed that you don't trust us to have your best interests at heart; we were brought up with NO expectation of an inheritance and want to spend YOUR money WISELY on your care. If you don't think that's what we're going to do, we are going to bow out. But we will not endanger OUR retirements or our children's' college educations because of your decisions. This is your choice. If you don't trust us, you are going to be on your own here.

Maybe that sounds cruel, or cold. But I don't diddle around with folks who are trying to steal my money, even if it's a parent.

In my world view, one saves for one's own retirement. Then for education for one's kids. Funding elder care is a very distant third, only if you are very set.
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Re: financially clueless senior MIL who thinks she’s rich

Post by ResearchMed » Thu Sep 26, 2019 3:44 pm

mptfan wrote:
Thu Sep 26, 2019 3:20 pm
gr7070 wrote:
Thu Sep 26, 2019 2:19 pm
I think you're far too conservative. Her likelihood to live another 20 years is insanely low.
I agree. The life expectancy of an 80 year old is 9 years, so it's not likely she will live much past the age of 90. Sure, it could happen, but it is unlikely. Planning for her to live until 104 is not realistic... only .017% of Americans live past the age of 100.

http://www.genealogyintime.com/Genealog ... page1.html
Isn't that percentage "at birth"? By the time people have already survived to an advanced age (or even less advanced), their average longevity likelihoods are much different, as the early deaths have been removed, and those have a bigger weight on the averages from birth.

One doesn't want to be too, too conservative, but being too short-sighted can have serious consequences.
I'm not at all sure it makes sense in OP's case, but an SPIA is one way to deal with the uncertainty like this.

RM
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Re: financially clueless senior MIL who thinks she’s rich

Post by BarbK » Thu Sep 26, 2019 3:46 pm

I look at it as a plus that she wants to move to independent living. My mom fought it and the day she moved in her quality of life improved immensely with the activities, people to eat with, friends.

Then once she is there, she can go through the cycles of Assisted Living, Memory Care whereas coming in from the outside as a memory care patient is mostly unheard of.

Another thing is that her expenses will pretty much be capped with Assisted living. No roofs, Air Conditioners, electric bills, even getting scammed is much less likely. I think my mom's expenses went up only $200 per month compared to maintaining a house. Food and linen service and weekly cleaning is typically provided.

If she is still driving, she can give up the car (and its' expenses) because they typically have vans that take their residents everywhere. (that would be a savings too).

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Re: financially clueless senior MIL who thinks she’s rich

Post by mptfan » Thu Sep 26, 2019 3:52 pm

ResearchMed wrote:
Thu Sep 26, 2019 3:44 pm
Isn't that percentage "at birth"? By the time people have already survived to an advanced age (or even less advanced), their average longevity likelihoods are much different, as the early deaths have been removed, and those have a bigger weight on the averages from birth.
I am aware of that and no, I did not quote "percentage at birth," I cited life expectancy for someone at the age of 80 which is 89, whereas life expectancy at birth for a female in the U.S. is 81, 77 for a male, with an average of 79.
Last edited by mptfan on Thu Sep 26, 2019 3:56 pm, edited 5 times in total.

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Re: financially clueless senior MIL who thinks she’s rich

Post by drawpoker » Thu Sep 26, 2019 3:52 pm

fposte wrote:
Thu Sep 26, 2019 1:23 pm
Is there any provision for continuing care at that retirement community? I don't know if her assets would be enough to get her into a CCRC even at 84, but it wouldn't hurt to ask, and that would solve the nursing home problem.
Not necessarily. This would work only if she goes into a Type "B" contractual CCRC. Those are the ones with a lower entry fee, you pay higher and higher monthly costs as you cycle thru the stages. All the way up (or down as you may look at it) to a skilled nursing bed. These places are fee-structured in this way as they know this is going to happen. They are prepped for this and, accordingly, they already have a certain no. of their SNF beds Medicaid-certified.

However, the Type"A" CCRC places, esp. the nicer, not-for-profit ones with religious affiliation, have the highest entry fees and the strictest financial requirements. Because they have no interest in getting tied up in Medicaid hassling.
Of course, they can't throw anyone who has depleted their assets out on the street. The contract guarantees lifetime care.

So, to get around this, the I.R.S. regs allow them to maintain "Benevolent Fund" with the monies therein earmarked to pay the monthly fee for any resident who has fallen on hard times and is unable to pay.

But, this rarely happens, as the bar is set so high on the financial qualifying form. They are going to quickly weed out anyone where the financials suggest this is a distinct, not remote, possibility. Like the MIL in this thread.

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Re: financially clueless senior MIL who thinks she’s rich

Post by Golf maniac » Thu Sep 26, 2019 3:53 pm

bayview wrote:
Thu Sep 26, 2019 2:55 pm
pinetree wrote:
Thu Sep 26, 2019 2:43 pm
She’s an adult. Explain your concerns once, including the calculations you’ve presented here. Then drop it. You don’t have to save her from her own bad decisions. If she runs out of money and has to get public assistance or be placed in a Medicaid nursing facility at the end of her life, that is her choice and her business. It’s painful to watch but that’s life.
Wow. I'm not from one of the cultures commonly regarded as sacrificing for one's elders - just boring WASP - but there is no way that I could take a "that's life" approach to an aging parent. Even when they made decisions that I thought were uninformed and ill-advised. I figure they took care of me in my early life, and I can try my best to do the same for them in their last years. I wouldn't sacrifice my retirement, but I'd do more than shrug my shoulders and say "oh well." Even if it wasn't technically my business, I wouldn't just walk away either.

OP, I suppose I'd have my husband (not you) and any siblings (not in-laws) have the convo with MIL, telling her that she has been given bad information, that while she's in decent shape, she needs to be very careful with her money, and that if she runs out, she will be looking at a Medicaid nursing home bed, and that the kids would do what they could, but that there's no magic. Definitely avoid giving the message of "OMG, you're broke", which would only make her ignore any accompanying message.

In the meantime, doesn't AARP or a similar outfit have a "facts of elder life" resource that sums up what SS, Medicare, and what-not do and don't do? She needs to see something in print, not scary words coming from her family or erroneous words coming from her friends.

I'd especially worry about someone steering her to Edward Jones. She's a prime candidate for exploitation.

***note: willingness to help out parents who have abused alcohol and drugs, or have gambling or shopping dependencies, is another story entirely. Enabling won't help anyone.
Have you ever been in this situation? I have and unless you are willing to take her to court and declared incompetent there is absolutely nothing that can be done. You can talk and explain her situation and your concerns but if she feels she is rich and can afford the retirement community most likely you will not convince her. Believe me, I went through this with my own Mom. It is tough to watch but probably nothing you can do.

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Re: financially clueless senior MIL who thinks she’s rich

Post by KyleAAA » Thu Sep 26, 2019 3:56 pm

Am I missing something? $4k per month is easily affordable with her SS and a $400k portfolio. It's not even borderline. Besides, Medicaid will pay if she runs out of money.

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Re: financially clueless senior MIL who thinks she’s rich

Post by drawpoker » Thu Sep 26, 2019 3:59 pm

KyleAAA wrote:
Thu Sep 26, 2019 3:56 pm
Am I missing something? $4k per month is easily affordable with her SS and a $400k portfolio. It's not even borderline.
Yes. You are.
There isn't going to be a $400K portfolio after paying the entry fee just to get into the $4K a month CCRC place.

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Re: financially clueless senior MIL who thinks she’s rich

Post by JoeRetire » Thu Sep 26, 2019 4:01 pm

miumiu wrote:
Thu Sep 26, 2019 12:54 pm
1. She thinks Medicare will take care of her, until she dies, including nursing home, long term care, etc.
She needs to learn the word "Medicaid".
2. She thinks she is rich and can do whatever she wants once she sells the house. Her house is in a rural area and probably sells for $200k. They have $190k in savings ( my FIL had it all in CD ). Her SSI+pension is about $2200 per month.

3. She would like to move into a retirement community and feels she can afford paying $4000 in monthly rent.
At 84, she may be correct. At her age, the life expectancy is about 8 years.
My husband tried to take over the bill pays and bank account to manage it for her. But she has refused to let him help.

What do you do about such a person? How to start the education about her financial reality?
Trying to take over sounds like a bad idea.

You might offer to pay for a few hours of time for her with a fee-only fiduciary financial planner. Often, a third party can get through where a family member cannot.

Ultimately, it's her money to with what she pleases. You and your husband will have to prepare yourselves for an eventuality where she runs out of money and must rely on Social Security, pension, and Medicaid.

Since you mostly seem to be worried about your own retirement, you can feel comforted that she cannot ruin it if you don't let her. You can't stop her from squandering away all of her money. You can stop that from ruining your own retirement.
Last edited by JoeRetire on Thu Sep 26, 2019 4:14 pm, edited 3 times in total.
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Re: financially clueless senior MIL who thinks she’s rich

Post by KyleAAA » Thu Sep 26, 2019 4:03 pm

drawpoker wrote:
Thu Sep 26, 2019 3:59 pm
KyleAAA wrote:
Thu Sep 26, 2019 3:56 pm
Am I missing something? $4k per month is easily affordable with her SS and a $400k portfolio. It's not even borderline.
Yes. You are.
There isn't going to be a $400K portfolio after paying the entry fee just to get into the $4K a month CCRC place.
How much will that be? She could still easily afford it with $300k. She may only have a few good years left. Let her live a little.
Last edited by KyleAAA on Thu Sep 26, 2019 4:09 pm, edited 1 time in total.

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Re: financially clueless senior MIL who thinks she’s rich

Post by JoeRetire » Thu Sep 26, 2019 4:08 pm

drawpoker wrote:
Thu Sep 26, 2019 1:35 pm
IF she absolutely refuses permission for doc to share her medical information - at age 84 to boot - that in itself would be a huge red flag and alarm going off. That she is in significant cognitive decline.
Nonsense.

Just because you are 84, that doesn't mean being unwilling to share your medical information is evidence of any sort of cognitive decline - significant or otherwise.
Don't be a lemming.

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Re: financially clueless senior MIL who thinks she’s rich

Post by willthrill81 » Thu Sep 26, 2019 4:11 pm

livesoft wrote:
Thu Sep 26, 2019 2:23 pm
The OP should have a fun time discussing all this in the presence of MIL and all her siblings. I think her siblings are they way to get her to think about things and not the OP nor OP's spouse.

The conversation could be started with, "Hey Mom, what have Uncle Ernie and your other sisters and brothers told about about growing old, Medicare, nursing homes, and so on."
-or-
"Hey Uncle Ernie, does Medicare pay for nursing home care?"
I agree that getting the MiL's perceived peers involved is a good way to start the discussion. But sadly, it sounds like her mental capacity may not great, so the proverbial ship may have already left the harbor.

But the OP may be borrowing trouble from tomorrow unnecessarily. At her age, it's very possible, maybe even probable, that the MiL will pass away before exhausting her funds.
Last edited by willthrill81 on Thu Sep 26, 2019 4:16 pm, edited 1 time in total.
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Re: financially clueless senior MIL who thinks she’s rich

Post by deanbrew » Thu Sep 26, 2019 4:15 pm

miumiu wrote:
Thu Sep 26, 2019 12:54 pm
2. She thinks she is rich and can do whatever she wants once she sells the house. Her house is in a rural area and probably sells for $200k. They have $190k in savings ( my FIL had it all in CD ). Her SSI+pension is about $2200 per month.

3. She would like to move into a retirement community and feels she can afford paying $4000 in monthly rent.
Something about this doesn't jibe. She lives in a rural area where her house is worth $200k, but "rent" in a "retirement community" costs $4,000 per month? I live in a rural area, and there are independent living active adult 55+ apartments that rent for $750 to $1,100 per month, including utilities. And these are nice, fairly new apartments. But they are strictly senior apartments, with no meals, no personal care and no medical services.

There are assisted living or personal care homes where the daily rates (note that it's not called rent) total $2,700 to $4,000 a month, but these are facilities where all meals are provided, assistance is offered for eating, bathing, etc.

I second the idea that if she is willing to move into a "retirement community", look at CCRCs where she will be taken care of for the rest of her life.
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Re: financially clueless senior MIL who thinks she’s rich

Post by One Ping » Thu Sep 26, 2019 4:16 pm

fru-gal wrote:
Thu Sep 26, 2019 2:05 pm
Ybsybs wrote:
Thu Sep 26, 2019 1:54 pm
Let's say her expenses are $5k a month ($4k community + $1 other stuff). If she ends up with $390k (that $200k of savings mentioned and $190k from the house), it's roughly $3k draw down per month after social security of $2k. That means she's got around ten and a half years of expenses.
Only if she is keeping the $390k under the mattress so it earns no interest, like even CDs are earning 2.5% a year.
Don't forget that if she's looking at a CCRC (Continuing Care Retirement Community) there is usually a 'buy-in' required. That could be upwards of $100K (or more, depending on where in the country you are looking and the type of community.)

That $390K may be more realistically like $300K. At a $3K/mo burn rate, that 10½ years is now closer to 8 years.
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Re: financially clueless senior MIL who thinks she’s rich

Post by drawpoker » Thu Sep 26, 2019 4:22 pm

JoeRetire wrote:
Thu Sep 26, 2019 4:08 pm
drawpoker wrote:
Thu Sep 26, 2019 1:35 pm
IF she absolutely refuses permission for doc to share her medical information - at age 84 to boot - that in itself would be a huge red flag and alarm going off. That she is in significant cognitive decline.
Nonsense.

Just because you are 84, that doesn't mean being unwilling to share your medical information is evidence of any sort of cognitive decline - significant or otherwise.
Well, of course am not suggesting she should share it with every Tom, Dick and Harry. :shock:

But, sharing with son is not nonsense! If she does, that sort of stubborn is not just the usual being mule headed, no, it could be a sign of cognitive trouble. Why I suggested bringing in the doctor on this.

Now that her husband is gone, who is she going to designate as her health care power of attorney? The son? That proxy represents a fair amount of sharing medical information, doesn't it.

Is she going to sign an advanced health care directive (sometimes called "Living Will") ? Is sharing that with her son and his immediate family also nonsense? Of course not.

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Re: financially clueless senior MIL who thinks she’s rich

Post by oldmotos » Thu Sep 26, 2019 4:31 pm

In our area there is a nice senior living facility offering all levels of care that will not kick you out if you run out of money. They have a large endowment that allows them to do that. You do need to prove you have enough assets at move in to cover 2 years of expenses. This policy is not guaranteed due to future uncertainties but it has worked for many years. They do not advertise this benefit but it is well known among those involved with senior living. You may want to check if something similar is available in your area.

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